Novices searching for a currency trading tutorial are always very keen to get out there and start earning profits but without the right attitude to your start up funds this frequently does not work out well. You might think that you want to get started so you start out with a modest equity and you do not care if you lose in the beginning, but at the back of everybody's mind is the aspiration of making massive profits and it can be very discouraging when things go wrong. In truth, a lot of beginning traders give up almost before they started, simply because they got started without the right preparation or sufficient back up trading fund. So how much money do you indeed should have to get started with forex trading?
Of course it is true that you can open a live trading account nowadays with just a hundred dollars or even less, but for most people that is not a great idea. You cannot start out with such a small margin equity and hope to be making a living from forex trading any time soon.
Another problem with starting fx trading with a too small margin equity is that you will be forced to overtrade. You might begin to treat it as a game. You will want something to happen and you do not have much to lose so you may make a trade that does not fit with your strategy just as an experiment. Sometimes it will win, more often it will lose. Probably on balance you will lose money that way, but that is not really what matters. The big problem with this is that unless you maintain very accurate records (which is hard to do when you are only risking cents on every trade) you will end up not knowing if your original forex trading strategy would have been a winner or not, because you didn't keep to it.
As for how much money you need, it's probably more than you think. Brokers will let you open a mini account with $1,000 but if that is just about all you have to trade with, then a micro account is more recommended. You should be trading micro lots or your risk will be too high and you might lose it all.
Multiplying that up, it would be wise to wait until you have $10,000 to open a mini account. And joining the big boys with a standard account requires around $100,000 if you wish to give yourself a fair chance of success.
It sounds like a lot of money but there is no need to let this keep you away of trading. Just keep in mind to think small and begin with micro accounts if your funds are not big enough. It is also recommended to use forex trading signals, in order to improve your risk profile. But even the best forex signals will not guarantee profits if the account balance is insufficient.
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Another problem with starting forex trading with a very small account balance is that you will be tempted to overtrade. You may begin to treat it as a game.
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